James H. Litinsky‘s JHL Capital Group has surged its exposure to RealPage, Inc. (NASDAQ:RP) and currently owns 9.85% of the company’s common stock. In a new filing with the Securities and Exchange Commission, JHL disclosed holding 7.80 million shares of the company, up from 4.50 million shares held earlier. The fund also changed the nature of its stake to activist.
Earlier in July, JHL reported initiating a stake in RealPage, Inc. (NASDAQ:RP), which contained 4.50 million shares, representing 5.7% of the outstanding common stock. The stock declined by around 4% since then, going through a signficant slump in July but having recovered recently. In this way, the stake that was added on June 25, became one of the largest in JHL’s equity portfolio. Overall, the equity portfolio of the fund is worth around $2.07 billion as of the end of June. The largest stake is represented by New York Times Co (NYSE:NYT), of which JHL owns around 9.38 million shares as of the end of the second quarter, while the stock has been losing ground. On the other hand, the second-largest holding, Howard Hughes Corp (NYSE:HHC), of which the fund owns 875,000 shares as of the end of the second quarter, has been growing over the last year. Mr. Litinsky managed to provide solid returns to investors of around 14% per year since the inception, including 2008, when the S&P 500 lost around 37%, while JHL returned 18%.
Since JHL holds an activist stake in RealPage, Inc. (NASDAQ:RP), the investor said that it purchased the shares because they believe that the company is undervalued. The fund also said in the filing that they have discussed with the company’s management through conference calls, investor presentations, as well as individual conversations. The investor also plans to further discuss the company’s business activity and the future.
So far, in the last several quarters, RealPage, Inc. (NASDAQ:RP), a company that is specialized in on-demand software solutions for the rental housing business decreased its net profits. For the second quarter, the company’s EPS amounted to a loss of $0.08, from a profit of $0.06 a year ago, while the revenue slightly picked up to around $95 million from $94 million. The company also made some important steps earlier this year, such as signing a partnership with Zillow Inc (NASDAQ:Z) in July and the acquisition of Notivus Multi-Family, LLC. a company that provides risk mitigation and compliance in vendor credentialing, and of Kigo, a Spanish vacation rental booking company.
Some other investors also seem to be bullish on RealPage, Inc. (NASDAQ:RP). Sharlyn C. Heslam‘s Stockbridge Partners inched up its stake by 4% during the second quarter to 6.44 million shares, which represent one of the largest holdings in the fund’s equity portfolio.
On the other hand, insiders have been selling shares of RealPage, Inc. (NASDAQ:RP) lately. Last week, Margot Lebenberg Carter, executive vice-president, CIO and secretary of the company, sold around 2,400 shares at around $18.10, cutting her stake to some 104,500 shares. William Chaney, executive vice-president for enterprise solutions, has also been reducing his position during the last couple of months. His last transaction, involved the sale of some 6,300 shares, following which the insider owns around 88,400 shares.
With this in mind, taking into account JHL Capital’s recent increase of the RealPage, Inc. (NASDAQ:RP) holding, the stock is worth some further research. The real estate business to which the company is connected is often profitable, and the technology sector has been constantly growing. Moreover, judging by the fund’s impressive track record, its commitment towards RealPage should also raise some flags related to the future returns of the stock.
Disclosure: none
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